THE PRESIDENT: Thank you all. Thanks. Be seated, please. Thank you.
Thanks for the warm welcome. Sit down. (Applause.) Thanks for coming.
It's great to be back in your county again. Marion, I appreciate the
invitation. I'd like to share some thoughts with you, and then I'd like to
answer some of your questions if you got time -- because I do. (Laughter.)

I really appreciate the Lancaster Chamber of Commerce for giving me an
opportunity to explain why I have made some of the decisions I have made.
My job is a decision-making job. And as a result, I make a lot of
decisions. And it's important for me to have an opportunity to speak to
you and others who would be listening about the basis on which I have made
decisions, to explain the philosophy behind some of the decisions I have
made. And so I'm looking forward to your questions, and I thank you for
giving me the opportunity to come and share them with you.

I'm sorry Laura is not with me. She's, by far, the better half of the Bush
family. (Laughter.) And she's a -- she really is a remarkable woman. She
-- when I married her she didn't like politics or politicians. (Laughter.)
And now she's the First Lady of the United States. And she's come to
realize what I understand: It doesn't take much to be able to put
influence -- to influence somebody in a positive way. And so she -- she
cares deeply about issues like malaria. She believes like I believe, that
we can eliminate the scourge of malaria and save lives all around the
world. She cares deeply about literacy. She cares deeply about making
sure women have got good information to -- when it comes to healthy choices
with their life so they don't suffer from heart ailment. She cares a lot
about women in Afghanistan. She cares a lot because she's got a big heart,
and I'm sure proud to call her "wife," and I think the country is lucky to
have her as the First Lady. (Applause.)

I appreciate -- I want to thank Tom Baldrige, the President of the Chamber,
and the officers of the Chamber, and the President-elect of the Chamber,
and all the folks who make the Chamber work.

I do want to contradict Marion, which is a little -- shouldn't be doing in
the first thing I say, but she said that because of me you're growing. No,
it's because of you you're growing. See, it's because of the
entrepreneurship and small business owners and hardworking people in
Lancaster County that you're growing.

I'm going to spend a little bit of time talking about what is the proper
relationship between the federal government and the risk-takers in society.
But I just want to make sure you understand what I know, and that is
prosperity occurs because people work hard and dream dreams, and work to
fulfill those dreams. And so I congratulate you on the economic vitality
of this region, Marion. Thank you for trying to give me credit where it's
not due.

I also want to thank the Chryst family for welcoming us to this facility.
This is -- Jay is the dad. He's expanded his business and he wisely turned
it over to his daughter -- (laughter) -- Dana.

So I asked the Chryst -- I said, how are you organized, from a tax
perspective? Dana said, we're a subchapter S. And the reason I bring that
up to you is I'm going to talk a little bit about tax policy here in a
minute, and when you cut individual income taxes, you cut taxes on a small
business that's organized as a subchapter S corporation. And so I talk
about tax cuts; I want you to be thinking about tax cuts not only for
yourself, but tax cuts for small business owners.

Expansion of this business has provided people new opportunity employments
-- new employment opportunities here in Lancaster County. You know, when
you give a man more money in his pocket -- in this case, a woman more money
in her pocket to expand a business, it -- they build new buildings. And
when somebody builds a new building somebody has got to come and build the
building. And when the building expanded it prevented [sic] additional
opportunities for people to work. Tax cuts matter. I'm going to spend
some time talking about it. I want to thank you for giving us a chance to
come and use you all as an example -- and also the hall works.

I do want to thank Senator Arlen Specter for being here today. Mr.
Senator, you didn't need to come. I'm honored you're here, and I'm sure
the people of this county are honored you're here, too. Thanks for coming.
(Applause.)

Finally, I appreciate the Congressman from this district, Congressman Joe
Pitts. I appreciate you being here, Congressman, thank you. (Applause.)
Sounds like you packed the audience with some of your family. (Laughter.)

Right before I walked in here, I had a chance to talk to some state
troopers and thank them for their service to the community. These folks
were first on the scene at the West Nickel Mines Amish School tragedy. I
am constantly amazed that our country produces people -- decent, honorable
people who are willing to serve. These folks had the ultimate challenge,
which is to bring comfort to a hurting community. I thank you for what
you've done, I thank you for what you're doing, and I thank you for what
you will do. I am honored to be in the presence of the troopers who were
there first on the scene. Thanks for coming. (Applause.)

I appreciate so very much, Krist Blank, joining us today. Mr. Blank, I'm
honored you are here. I will tell you that, like a lot of Americans, I was
deeply troubled when, you know, I found out that mothers and dads were
grieving for the loss of their daughter. And I also was -- my soul and
spirits were lifted when I read the stories about the forgiveness and
compassion that the Amish community showed toward the shooter's family.

It was a remarkable statement of love and strength and commitment for
people who had suffered so mightily to say to, you know, a widow and her
children that we're able to overcome our grief and express our deep love
for you. And so I want to thank you, sir, and your community for being
such great examples of the compassion of the Lord. And I'm honored you're
here. (Applause.)

Knowing him, he's sorry I even talked that way, see? He's a remarkable guy
who told me something interesting. He said, I'm praying for you, Mr.
President. This is not going to be a church service, I promise you.
(Laughter.) But I will tell you that the prayers of the people matter a
lot, they really do. And it's one of the most inspiring -- (applause.)

I want to talk a little bit about the environment necessary to continue
economic growth. The job of this government is not to try to create
wealth. The job of the government is to create fiscal policy such that
people feel inspired or confident in risking capital. In other words, the
job of government is to create an environment that encourages
entrepreneurship. One of the issues that we're going to be facing in
Washington, D.C. is how to spend your money. In other words, what do we do
with the good money that we've -- the good money we've collected? How do
we spend it?

And there's a -- there's a difference of opinion in Washington, D.C., right
now. I've submitted my budget, the core principle of which is that we will
do what it takes to defend our homeland and make sure our troops have what
it takes to do their jobs -- (applause) -- and keep your taxes low by not
raising them. And we showed the way forward on how to get to balance in
the year 2012. In other words, you got to be fiscally responsible, set
priorities with your money, and keep your taxes low.

The principle is, is that tax cuts inspire investment, encourage
consumption and savings. In other words, the more money you have, as
opposed to the government having, the more likely it is the local economies
will grow. That's why I brought up the example of the S-CHIP [sic]
corporation. When we cut taxes on everybody who pays taxes, we cut taxes
on small businesses, too. And one of the principles on which I'm making
decisions is I'd rather the Chrysts spending their money than the
government spending their money. See, I think they know how to spend their
money in such a way that their business will grow.

Now, there's a different approach in Washington. And folks have suggested
that we increase spending. As a matter of fact, a five-year budget that's
submitted by the current leadership of the Congress increases spending by
$205 billion over five years, which would -- and so you say, that's fine,
sounds good, all these programs sound wonderful. Except how you going to
pay for it? That's the question I ask. How are you going to pay for the
promises? And the answer is, raising taxes. And I think they're wrong to
raise taxes on the American people. I know we don't need to raise taxes on
the American people.

This economy has got in some difficulties when it comes to the housing
markets, and the last thing we now need to do is raise taxes. See, taking
money out of the economy at a time when the housing market is adjusting
could exacerbate economic difficulties. And the role of government is to
try to create an environment so that small businesses flourish and families
can realize opportunities and dreams, and consumerism remains strong.

And so what you're going to see me making decisions this year is when they
spend -- they try to increase taxes on you, I'll use the prerogative given
to me under the Constitution, and I'm going to veto the tax bills. I'm
going to -- (applause.)

I just vetoed a bill today, and I want to explain to you why. It's called
S-CHIP -- Children's Health Insurance Policy. First of all, the intent of
the S-CHIP legislation passed previous to my administration is to help poor
children's families buy the children health care, or get them on health
care. That's what it is intended to do. Poor children in America are
covered by what's called Medicaid. We spend about -- this year -- about
$35.5 billion on poor children's health insurance. So the first point I
want to make to you is, a lot of your money is being spent to make sure
poor children get help, medical help.

In other words, when they say, well, poor children aren't being covered in
America, if that's what you're hearing on your TV screens, I'm telling you
there's $35.5 billion worth of reasons not to believe that. And by the
way, that Medicaid expenditures only accounts for children of the poor, it
doesn't account for the mothers and fathers. So a lot of your money does
go to help poor families with health insurance.

The S-CHIP program was supposed to help those poor families, the children
of poor families have the ability to get health insurance for their
children. I strongly support the program. I like the idea of helping
those who are poor be able to get health coverage for their children. I
supported it as governor, and I support it as President of the United
States.

As a matter of fact, my budget -- the budget request I put in said, let's
increase the spending to make sure that the program does what it's supposed
to do: sign up poor children for S-CHIP. The problem is, is that the
current program -- and by the way, there's about half a million children
who are eligible who aren't signed up. So I said, why don't we focus on
the poor children rather than expand the program beyond its initial intent.

I want to tell you a startling statistic, that based on their own states'
projections -- in other words, this isn't a federal projection, it's the
states saying this is what's happening -- states like New Jersey, Michigan,
Minnesota, Rhode Island, Illinois and New Mexico spend more money on adults
in the S-CHIP program than they do on children. In other words, the
initial intent of the program is not being recognized, is not being met.

It is estimated by -- here's the thing, just so you know, this program
expands coverage, federal coverage up to families earning $83,000 a year.
That doesn't sound poor to me. The intent of the program was to focus on
poor children, not adults or families earning up to $83,000 a year. It is
estimated that if this program were to become law, one out of every three
person that would subscribe to the new expanded S-CHIP would leave private
insurance.

The policies of the government ought to be, help poor children and to focus
on poor children. And the policies of the government ought to be, help
people find private insurance, not federal coverage. And that's where the
philosophical divide comes in. I happen to believe that what you're seeing
when you expand eligibility for federal programs is the desire by some in
Washington, D.C. to federalize health care. I don't think that's good for
the country. I believe in private medicine. I believe in helping poor
people -- which was the intent of S-CHIP, now being expanded beyond its
initial intent. I also believe that the federal government should make it
easier for people to afford private insurance. I don't want the federal
government making decisions for doctors and customers. (Applause.)

That's why I believe strongly in health savings accounts or association
health plans to help small business owners better afford insurance for
their workers. That's why I believe we ought to change the federal tax
code. You're disadvantaged if you work for a small business and/or an
individual trying to buy insurance in the marketplace -- disadvantaged
relative to somebody working for a large company. If you work for a large
company, you get your health insurance after tax. If you buy insurance you
have to pay -- no, you buy your insurance after taxes as an individual; you
get your insurance pre-tax when you're working for a large corporation.
You're at a disadvantage if you're an individual in the market place.

So I think we ought to change the tax code. I -- my view is, is that every
family ought to get a $15,000 deduction off their income taxes, regardless
of where they work, in order to help people better afford insurance in the
marketplace. (Applause.)

So I want to share with you why I vetoed the bill this morning. Poor kids,
first. Secondly, I believe in private medicine, not the federal government
running the health care system. I do want Republicans and Democrats to
come together to support a bill that focuses on the poor children. I'm
more than willing to work with members of both parties from both Houses,
and if they need a little more money in the bill to help us meet the
objective of getting help for poor children, I'm more than willing to sit
down with the leaders and find a way to do so.

So thanks for giving me a chance to discuss one of the many decisions I
make as your President. Decision making requires a couple of things -- and
then I'll answer some questions -- one: having a vision, having a set of
beliefs, set of principles by which one makes decisions. You know, if
you're constantly trying to make decisions based upon the latest poll or
focus group, your decision making will be erratic. You got to have a core
set of beliefs. I believe you spend your money better than the government
spends. I believe that the system works better when there's more money in
your hands.

And foreign policy, I believe in the universality of freedom. I believe
that a gift -- (applause) -- I believe there's an Almighty and I believe a
gift of the Almighty to each man, woman, and child on the face of the Earth
is freedom. That's what I believe. And I believe it's in the interest of
the United States of America to help people become free. That's how you
yield the peace we all want. We want people to live in free societies.

And if you believe in the universality of freedom, it's in the interest of
this country to act. That doesn't mean military operations. But it does
mean, for example, relieving suffering. I also believe in the admonition,
"To whom much is given, much is required." A lot has been given to the
United States. I believe it's in our interests to help relieve needless
deaths when it comes to mosquito bites around the world. I believe it's in
our interests to help relieve the suffering of HIV/AIDS on the continent of
Africa. It's in our interests to do so. It's part of the belief system
that says, you know, that we have obligations and duties to ourself.

No, by relieving suffering overseas, not only do you lift the moral sights
of our country, but it recognizes the reality of the world in which we
live. When there's despondency, despair and hopelessness overseas, it can
affect the security of the United States of America. And so I -- what I'm
telling you is that I made a lot of decisions when it comes to your
security and the peace of the world. And I did so based upon certain
fundamental principles.

Secondly, it's important to delegate. There's a lot of action in
Washington, D.C., believe me, and I've got a lot of decisions to make. And
so I delegate to good people. I always tell Condi Rice, I want to remind
you, Madam Secretary, who has the Ph.D. and who was the C student.
(Laughter.) And I want to remind you who the advisor is and who the
President is. (Laughter.) I got a lot of Ph.D.-types and smart people
around me who come into the Oval Office and say, Mr. President, here's
what's on my mind. And I listen carefully to their advice. But having
gathered the device [sic], I decide, you know, I say, this is what we're
going to do. And it's "yes, sir, Mr. President." And then we get after
it, implement policy.

It's a joy to be your President. It's not only an honor, it's a joy,
because I truly believe the decisions I am making will yield the peace we
want and the prosperity that we all desire.

So now I'll be glad to answer some questions from you if you got any. If
not, I can keep on blowing hot air until the time -- (laughter) -- until
the time runs out.

THE PRESIDENT: Okay, thank you, sir. (Applause.) Yes, those same polls
will tell you that they're worried about catastrophe in the Middle East
affecting the security of the United States. In other words, you pretty
well -- look, I'm not going to argue polls with you, but I will tell you
this, sir -- first of all, if we have a troop in harm's way, they're
going to have the best -- they're going to have what's necessary to -- so
they can do their job. (Applause.)

And secondly, we are bringing troops home. General David Petraeus
announced that he wasn't going to replace 2,200 Marines that were in Anbar
province, and the reason why he didn't feel like he needed to replace them
is because they were successful. They had done their job. Reconciliation
is taking place. Normal people are beginning to step forward and say, we
want to live in peace. Al Qaeda, that thought they were going to have
Anbar as a safe haven, has been rejected by the local populace. And he
believes, as do the Iraqis, that we can maintain security without 2,200
troops.

We're going to bring another brigade home by Christmas. So that's
5,700-troop reduction. General Petraeus, in his testimony, recommended to
me -- a recommendation I accepted -- that we can get down to 15 brigades by
July. That's 20 from 15.

And the reason I tell you this, sir, is I want to make a couple of points.
One, if I didn't think the mission was necessary for our security, I
wouldn't have our troops there. Secondly, if I didn't think we could
succeed, I wouldn't have our troops there. I cannot look in the eye of a
mother or father whose son or daughter is in combat and not believe that we
can succeed, and it's necessary.

Secondly, I believe that it is very important for the Commander-in-Chief to
take the advice of his military commanders very seriously. In my position,
sir, I don't want our troops feeling like I'm making decisions based upon
politics when their lives are at risk. I want our troops knowing that I'm
making decisions on the considered judgment of our military, all aimed at
accomplishing an objective, which is for a country in the heart of the
Middle East to be able to govern, sustain itself, and serve as an ally
against these extremists and radicals. (Applause.)

Let me give you my world view on this. Like you, I'd like them home. I
really do. But my decisions have been based on my -- or at least my belief
that what we're seeing is one of the -- a great ideological struggle
between forces of ration -- rational behavior, decent people, lovers of
liberty, versus radicals who have a belief system and they're willing to
murder the innocent to achieve -- to advance their objectives. That's how
I view it. I don't think you're a religious person if you murder the
innocent to achieve political objectives. I think you're a person who is
manipulative and cynical and willing to kill in the name of religion; I
don't think you're religious.

Secondly, a lot of my decision making has been influenced by what happened
on September the 11th, 2001. I vowed that day that I would do everything
in my ability to protect you, and that I would -- I wouldn't tire -- I
can't remember my exact words, but I would stay on the job. And that's
exactly what I have been doing.

On the one hand, we're pursuing radicals and extremists through sharing of
intelligence and through special operations and through working alliances
to bring them to justice before they come and kill again. And I would
remind you that the people that have swore allegiance to Osama bin Laden in
Iraq wanted Anbar province as a safe haven from which to launch further
attacks on the United States. And one of the great successes of this
conflict has not only been to liberate 25 million people from the clutches
of a brutal tyrant, but to make sure that Anbar province wasn't a safe
haven for those who swore allegiance to Osama bin Laden.

But in the long run, the way to defeat ideological people is with a better
ideology. And there's no better ideology than one based upon liberty. If
you believe in the universality of liberty, then it shouldn't surprise you
when 12 million people in Iraq went to the polls. They said, we've been
given a chance to express our individual desires. And they went to the
polls to vote.

We have been through these kind of conflicts in our history. We went
through the conflict against communism and fascism. These wars play out
differently. This war is really hard for the American people to understand
because the enemy uses asymmetrical warfare. They use hundred-dollar
weapons to destroy half-a-million-dollar vehicles -- which has got to, as a
taxpayer, concern you. I understand that. I understand it.

But the struggle is just as intense today as it was in the '40s and the
'50s. I must have told this story hundreds of times, that one of the most
amazing aspects of my presidency was my relationship with the Prime
Minister of Japan, Prime Minister Koizumi. What's amazing about it is that
when my dad was 18, he signed up to fight the Japanese; they were the sworn
enemy of the United States of America. Thousands of people died in that
conflict. They attacked America -- the last time we were attacked, by the
way, prior to September the 11th was Pearl Harbor. And 60 years later, I'm
sitting at the table with the Prime Minister of Japan talking about peace;
talking about how to help young democracies thrive in this ideological
struggle, both of us knowing full well that the ultimate defeat of
extremism in the name of an ideology that is dark is freedom -- is the
light of freedom. And the amazing thing is, is that what happened was that
Japan's form of government changed.

Liberty is transformative. Our one-time enemy is at the table talking
about peace. And the same thing is going to happen in the Middle East.
And it's going to be tough to get there and it's hard work. But you --
I've got faith in the transformative power of liberty. I believe that
people want to be free. I believe a gift of the Almighty to each man,
woman and child is freedom. And I believe, when given the chance people
want to be free. And I firmly believe freedom yields the peace we want.

And so, sir, to answer your question, it's important we succeed, and it's
important we support our troops. (Applause.) Thank you.

Yes, sir. I appreciate the question. Yes, they'll get it for you. I'm
not going to read it right now. Go ahead.

Q Thank you. Hello. First, I appreciate you being here and being in
this kind of forum to answer questions.

THE PRESIDENT: Thank you.

Q It helps me to have a better understanding of you as a person --

THE PRESIDENT: I hope so.

Q -- so thank you very much. Thanks. I have two questions, if I could.
One is, can you talk about the farm bill and how it's going to help local
farmers in this area? And then would you also talk about global warming
and how the U.S. is being a leader in a worldwide effort to combat global
warming? Thank you.

THE PRESIDENT: Thank you. Thanks, great question. First, on the farm
bill. I believe it's in the interest of local farmers to have markets
available to them. In other words, a core principle of any good farm
policy is for the administration to work to open up markets. If you're
good at something -- and we're really good at farming -- we want to be in a
position to sell that which you grow overseas.

Secondly, I believe very strongly that programs that encourage
overproduction are programs that need to be seriously evaluated. In other
words, I'd rather you selling into existing markets than producing where
there be no market. In other words, it's a combination -- look, I'm a
safety-net person for farmers. I just want to make sure the safety net is
a actual safety net, not a incentive for overproduction.

Thirdly, I strongly believe in the conservation title inherent in the farm
bill, the last farm bill. This is a CRP program which says to farmers,
look, we want to help you set aside part of your land that may not be good
for farming, but would be good for habitat, soil conversation. It's really
one of the -- I think one of the great accomplishments of this
administration is to work with the farm community to have an advanced CRP
program.

And that's kind of the inherent principles. The marketplace has worked for
farmers. I also believe -- this is going to answer your global warming
question, as well -- it's in the nation's interest to diversify away from
hydrocarbons. Probably comes as a shock to you from a guy from Texas
saying that. But it's -- dependence on oil creates national security
issues. There's too many people who have got oil that may not like us.

Secondly, we import about 60 percent of our oil from overseas --
fortunately, most of it fro